Capital One Direct, the online banking division of the credit card giant, offers a way to earn a little more on your savings account.

And we mean a “little” more. But in today’s economy, every little bit helps.

Capital One pays 1.35% APY on savings accounts with a minimum balance of $2,500. It’s not the best, but it certainly isn’t the worst.

But if you maintain a $15,000 balance in your account — or use a Capital One credit card once a month — you not only earn the 1.35% APY, but you get an extra 10% bonus that’s paid on the interest you earn, and it’s paid quarterly.

Here’s how it works.

Assuming a $15,000 balance, the interest earned in the first year would total $202.50. Then you earn an extra 10% on that interest, which is paid quarterly and totals $20.25. So your actual earnings add up to $222.75.

The fine print: You can make no more than six withdrawals per month by online transfer. If you take advantage of the credit card option, the card must be in good standing; and the account offers electronic statements only. And, as with any savings account, the rate is variable and can change at any time.

Use our database of savings accounts to compare this rate with the best deals from scores of other banks.

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If you are a Costco member the rate is 1.40% with he same 10% bonus per quarter. One problem is Capital One does not post the 10% bonus interest for at least 30 days and the fine print states it can take from 6 to 8 weeks for the bonus interest to be posted to the account. So you are not earning interest earned during the delay of their posting the bonus. That really stinks in this computer age when things like interest posting can and should happen within minutes or at least hours and not days and months. Most ACH transfers with other institutions your money is available as soon as the ACH takes place. With Capital One they hold the funds for 5 business days no matter what your balance. Capital One is a 4 star bank but they do have some quirks.

simplicio said:on May 6th at 06:47 am

I just opened one of these accounts with capital one. My biggest problem with them is that, when you transfer money from capital one to your checking account, it takes 3 business days to get there! On their website, they try to blame this on the ACH process. But I did an experiment where I initiated a transfer from my savings account at dollar savings and another one from capital one. The dollar savings transfer arrived the next day, the capital one transfer showed up several days later.

sangiovese said:on May 7th at 08:58 am

simplicio: besides capital one taking forever with their ACH transfer they will take at least a month to post that 10% bonus. they claim they do it MANUALLY. are you kidding me? in this computer age?
they are not paying interest on the bonus interest all the while they are doing the calc MANUALLY. LOL
plus the attitude at capital one is as bad as an actor on tv playing a role of a loan shark. they do not care, but the interest at 1.40 if you are a costco member is better than most banks today. there is a small bank in wisconsin that is paying 1.53 on savings up to $250,000. 4 star bank. they do not advertise and if they suddenly got a bunch of new money then the rate would probably go down so i think i will keep that bank to myself for a while longer.